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Subject Author Date
Which Line in Schedule C ? greg9876a 03-17-2008
Posted by greg9876a on March 17, 2008, 7:56 am
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 Last year I received some shares of a private company (startup) as
part of a cooperation agreement. I already determined that despite
being non-cash (and despite not being traded in the free market and it
is not easy to convert them into cash) I need to enter their FMV as
non-capital-gain income (for the year they were received).

But where do these go in Schedule C?

Line 1 (Gross receipts or sales) ?
Line 6 (Other income)?
Something else?

Thanks,
Greg

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Posted by Harlan Lunsford on March 17, 2008, 5:13 pm
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 greg9876a@googlemail.com wrote:
> Last year I received some shares of a private company (startup) as
> part of a cooperation agreement. I already determined that despite
> being non-cash (and despite not being traded in the free market and it
> is not easy to convert them into cash) I need to enter their FMV as
> non-capital-gain income (for the year they were received).
>
> But where do these go in Schedule C?
>
> Line 1 (Gross receipts or sales) ?
> Line 6 (Other income)?
> Something else?

Since you indicate/suggest that you are already a proprietor, If said
shares were received as compensation for work you did in connection with
the startup, e.g. an accountant/lawyer assisting with business formation,
then it's line 1 only.

But if not for services rendered, just what the heck do you mean by
"cooperation agreement"?

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by greg9876a on March 18, 2008, 10:52 am
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>
> Since you indicate/suggest that you are already a proprietor

Correct.

> If said shares were received as compensation
> for work you did in connection with the startup,

Work that I did but mostly work that I *will* do in the next 3
years...

Is it still line 1?


> But if not for services rendered, just what the heck do you mean by
> "cooperation agreement"?

Services rendered and services that *will* be rendered. In the future.

If I am not mistaken, there is an IRS term called "good will". I
wonder if this is the case here.

Still line 1?

Or line 6?

Thanks,
Greg

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Harlan Lunsford on March 18, 2008, 6:29 pm
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greg9876a@googlemail.com wrote:
>> Since you indicate/suggest that you are already a proprietor
>
> Correct.
>
>> If said shares were received as compensation
>> for work you did in connection with the startup,
>
> Work that I did but mostly work that I *will* do in the next 3
> years...
>
> Is it still line 1?
>
>
>> But if not for services rendered, just what the heck do you mean by
>> "cooperation agreement"?
>
> Services rendered and services that *will* be rendered. In the future.
>
> If I am not mistaken, there is an IRS term called "good will". I
> wonder if this is the case here.
>
> Still line 1?
>
> Or line 6?

Line 1.

ChEAr$,
Harlan Lunsford, EA n LA

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

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